Property News for Queenstown In April 2014

Date: 20th May 2014 by Tim Medland

We are experiencing another game of 2 halves in Queenstown for April 2014, with the number of sales remaining subdued for the 2nd month whilst prices remain strong, according to local and regional statistics. As noted by REINZ CEO Helen O’Sullivan, first home buyers are less active in the market which is expected as the effects of new LVR rules deepen, but “the number of investors is on the increase with the number of section sales also up noticeably” (Excerpt) – On the good news front the Reserve Bank has indicated this month that the LVR rules are likely to be eased toward the end of this year, which could see a new surge of activity in first home purchases. Wait and see!

In a similar trend to what we observed last month, the main contrast is between a comparatively low number of residential sales in April 2014, with 39 sales versus 58 in April 2014, and the total value of sales for this year so far, with $138m compared to $136.4m for the same period last year and $127.9m the previous year.

Even more interesting is the median price comparison, also lower with $545,000 in April 2014 versus $566,000 in April 2013.This can only happen when high end investors make a number of top value property purchases, a typical factor in the Queenstown market. Generally prices are still on the increase, by over 7% in Central Otago and 5% in Queenstown in March 14 Compared to March 2013 (Source-REINZ) and a similar trend in April 2014.

The number of days to sell a dwelling was 38 in April 2013, a substantial improvement compared to 50 days to sell in April 2013. Once again you would not expect properties to sell faster when the number of sales has decreased, but this actually makes sense when you know that investors are still active and not restricted by their need to raise the required capital.

Overall the 6 months to April 2014 also remain subdued with a total of 286 sales versus 329 last year. The period of 12 months to April has delivered 577 sales confirming a decrease compared to 606 sales in the 12 months to April 2013.
In summary for Queenstown, sellers remain confident in their asking prices and investors reflect that buoyant feeling by making fast decisions, whilst entry level property bears the brunt of current regulatory conditions.

Posted in: Statistics